Butler v. Butler
| Decision Date | 02 March 1993 |
| Citation | 423 Pa.Super. 530,621 A.2d 659 |
| Parties | Carol E. BUTLER, Appellee, v. Leon I. BUTLER, Appellant. Carol E. BUTLER, Appellant, v. Leon I. BUTLER, Appellee. |
| Court | Pennsylvania Superior Court |
Rebecca N. Tortorici, York, for Carol Butler.
Andrew B. Brown, York, for Leon Butler.
Before MONTEMURO, 1 KELLY and CERCONE, JJ.
In this opinion, we are called upon to determine whether the trial court committed error by apportioning the marital assets, including an accounting firm in which the husband is a shareholder, by their value on the hearing date instead of their value on the separation date when the husband's ownership interest in the accounting firm decreased from a one-half interest at the time of separation to a one-third interest on the hearing date. In addition, we are called upon to determine whether the trial court properly ascribed the going concern value to the husband's shares in the accounting firm rather than valuing them in accordance to the accounting firm's shareholders buy-sell agreement. For the reasons that follow, we vacate the order of equitable distribution and remand for a re-determination consistent with the principles stated herein.
The relevant facts and procedural history of this case are as follows. Carol Butler and Leon Butler were married on May 10, 1964. In the early years of their marriage, the wife worked as a school teacher, but later stayed at home to care for the parties' three children. In 1980, the wife re-entered the job market as a retail sales clerk and briefly owned a gift shop. Leon Butler is employed as a partner in a certified public accounting firm.
In May of 1983, after nineteen years of marriage, the parties separated. A brief reconciliation from May to December 1984 ended when the parties finally separated. The wife remained in the marital residence with the couple's children. When the parties were divorced by a decree entered on April 12, 1988, the issue of equitable distribution of the marital property remained unresolved.
A court-appointed master held hearings and received evidence on matters related to equitable distribution, alimony pendente lite, alimony, counsel fees, and costs. The interim master's report of December 11, 1988 recommended that the wife receive $400.00 per week of alimony pendente lite, retroactive to May 1, 1988.
Evidence presented before the master showed that at the time of the parties separation, the husband was a fifty percent owner in the certified public accounting firm of Einhorn, Butler and Gingerich. In 1986, the firm acquired an additional partner, reducing the husband's interest in the firm to one-third. According to the wife's expert, the firm had a value of $546,889.00. The husband asserted that the value of his interest in the firm was actually $2,450.00, the sale price of the husband's shares, as determined in the buy/sell agreement.
The master also heard evidence that the wife was working in retail sales and earning a gross monthly salary of $1,008.42 per month. The wife introduced evidence that her monthly expenses amounted to $4,237.00. The wife testified that monetary advancement would require an additional six to seven years of work experience. At the time of the hearing, the parties' youngest child was still living in the marital residence with the wife, and the elder children, who were away at college, would return to the marital residence during their school vacations.
From the time of final separation in December of 1984 until October of 1988, the husband maintained the marital residence and paid child support. During this time the husband made the monthly mortgage payments, as well as repair bills, insurance, utilities, and other costs associated with the maintenance of the marital residence.
The master determined that the total value of the marital assets was $444,419.25 and recommended that the wife receive fifty-five percent of the value of the marital assets. The master determined that the following were marital assets retained by the husband:
1. 200 East Market Street ........................... $107,092.99
2. 1 1/3 interest in Einhorn, Butler and Gingerich ... 141,148.16
3. Stocks as follows
140 shares W.L. Morgan ............ 1,558.00
761.86 shares Mellon Bank ........ 20,379.00
44 shares Figgie .................. 1,903.00
75 shares William Home Products ... 3,023.00
4. Dividends on stocks ................................. 8,456.00
5. O.K. Corral ........................................ 10,000.00
6. Life insurance ...................................... 5,210.00
7. Automobiles
Mercedes
Aztec ............................................. 22,500.00
8. Husband's pension ................................... 7,800.00
9. Grandfather clock .................................. 10,000.00
10. Bank accounts
Community National .................................... 44.46
York Federal ......................................... 250.00
York Bank and Trust ................................... 60.00
11. B.E.G. Associates ....................................... 0.00
12. Cash Management Account ........................... $25,120.72
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Total $364,545.33
Husband to pay the loan he made to fund "All Tied Up" ...... 16,000.00
and to pay the Einhorn Est................................. 141,791.67
and to pay his loan from
Sheldon Lipsity ............................................. 6,765.00
-----------
Total $199.988.66
The master also recommended that the husband should take the office building subject to the encumbrance in favor of the York Bank. In addition, the master determined that the wife ought to retain the following marital assets:
1. 60 Tyler Run Road ............................................. $154,035.25
2. Fixtures, furniture, silverware, chattels at 60 Tyler Run
Road (not including the grandfather clock) .................... 20,000.00
3. Jewelry ......................................................... 13,000.00
4. Renault automobile ............................................... 4,500.00
5. 551.38 shares Continental Bank .................................. 21,986.06
6. 222 shares Drovers Bank Corporation .............................. 8,880.00
7. Cash--Cash Management account ................................... 32,514.28
8. Stock dividends .................................................. 2,272.00
9. Life Insurance (Penn. National) .................................. 1,000.00
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Total .. $258,187.59
Wife to pay Dauphin Deposit Loan ................................ 13,757.00
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Total .. $244,430.59
The master also recommended that the wife take the marital residence subject to a mortgage and that she pay a $1,000.00 credit card debt. Master's Report of 5/12/88 at 25-27.
After determining that the fair rental value of the marital home was $1,500.00 per month, the master recommended that the husband receive a credit for one half of the fair rental value for the period of May, 1983 until November, 1988, when the wife occupied the home rent-free. In addition, the master further recommended that the wife receive $300.00 per week in alimony. Finally, the master determined that the wife should be awarded counsel fees of $7,500.00 and expenses of $1,750.00. Both the wife and husband filed exceptions to the master's report.
On October 2, 1991, the trial court issued its opinion and order affirming most of the master's recommendations, thereby dismissing the majority of the parties' exceptions. However, the trial court modified the master's recommended alimony pendente lite award of $400.00 per week retroactive to May 1, 1988 to an alimony pendente lite award of $400.00 per week for the period of May 1, 1988 through June 15, 1989 and $300.00 per week for the period of June 16, 1989 through the date of the entry of the trial court's order. The trial court also directed that the husband pay $300.00 per week in alimony to the wife for a period of four years. The wife filed this timely appeal and the husband filed a cross-appeal.
On appeal, the wife raises the following issue for our review:
1. THE TRIAL COURT IMPROPERLY DETERMINED THAT THE HUSBAND OWNED ONE-THIRD OF HIS ACCOUNTING PRACTICE FOR EQUITABLE DISTRIBUTION PURPOSES WHEN HUSBAND OWNS FIFTY PERCENT OF THE PRACTICE FOR EQUITABLE DISTRIBUTION PURPOSES.
In a cross-appeal, the husband raises the following issues for our review:
1. DID THE LOWER COURT ERR IN ESTABLISHING THE VALUE OF THE PROFESSIONAL CORPORATION PARTLY OWNED BY THE HUSBAND, AND PARTICULARLY THE "INTANGIBLE" VALUE OF THE CORPORATION?
2. DID THE LOWER COURT ERR IN AWARDING COUNSEL FEES TO THE WIFE IN ADDITION TO AWARDING ALIMONY PENDENTE LITE TO THE WIFE?
3. DID THE LOWER COURT ERR BY FINDING THAT THE HUSBAND WAS DUE A CREDIT FOR ONE-HALF OF THE FAIR RENTAL VALUE OF THE MARITAL RESIDENCE BETWEEN DECEMBER, 1984 AND OCTOBER, 1988 AND THEN FAILING TO INCORPORATE SAID CREDIT INTO THE FINAL EQUITABLE DISTRIBUTION ORDER?
The husband and the wife raise various issues on appeal challenging the trial court's affirmation of the master's recommendations. Initially, we note that our standard of review is a limited one. We need determine whether the trial court, by misapplication of...
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